How to get debt relief for your small business: Improve your cash flow
In last week’s article, we talked about how getting a small business administration loan or an alternate terms loan could help keep your business going during rough patches. We’re continuing the series about getting debt relief for your small business in this article, where we will tackle another significant aspect you can approach: improving your cash flow.
Whether your small business consists of working in trucking, constructions, services or retail, the truth of the matter is that any endeavor to optimize your budget won’t only get you potential loaner’s regard, but also improve your overall financial situation. Here are some steps you can take to improve your cash flow.
Cut unnecessary expenses
The best way to get started is to map out all your monthly expenses and see which are necessary for the running of your business and which have hitched a ride as a nice-to-have perk for the job. Prioritize cutting the unnecessary expenses - such as software subscriptions or unproductive sales channels - and then move on to the next step.
Reduce expenses where possible
More than looking to cut monthly expenses, also keep an eye out for opportunities to reduce costs. Things like renegotiating provider fees or straightforward changing providers, selling equipment and leasing it instead in times of use, or choosing to externalize certain services may all come together to help push your finances in the green.
Update your prices
If you haven’t done a recent pricing screening, it may be time to do so. Do a quick market study and see if prices for your certain products or services have increased recently. If following suit with your own pricing structure won’t turn away existing clients and still keeps you in the market margins for your services, then it’s a good idea to update those prices. Not only will this boost your income almost immediately, but you can also push this additional revenue specifically towards your debt relief efforts.
Focus your efforts on higher margin products or services
Consider what products or services you could add to your offering that have higher margins than the existing ones. When you sell more higher margin products or services, this will also reflect in your bottom line. Not to mention, such products or services may translate to a greater value delivered to existing customers, so consider upgrading their services, and attract new customers as well.
Don’t avoid the hardest task: assessing your staff
While it’s never a comfortable option to pursue, sometimes assessing your staff becomes a necessary step when trying to take back control of your business’ finances. And that means looking which members of your staff are necessary for your ongoing activity, which are the best performers, and which fulfill tasks that would be more economical to be outsourced towards another company (e.g. legal, accounting, marketing are all cheaper when delivered by another agency for which you pay a retainer fee). It may also mean reducing the number of shifts or working fewer hours for some employees.
At the end of the day, when you set out to optimize your business’ budget, remember it’s a task that you should be doing regularly, and that can bring you benefits in the long run. Not only are you ensuring the wellbeing of your business for the long term, but you’re also ensuring that whenever you decide to pursue debt consolidation or refinancing or to apply for a loan, your business will have checked off some of the necessary boxes in any application process.
If you’re looking to consolidate your debt or restructure your loans, get help from a business debt expert like Creditors Relief. We’re willing to advise you with your debt relief options and our review process is free. Sign up here.